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TheStreet Open House

Rowan Provides Fleet Contract Status Update

Stock quotes in this article: FCX, RDC

HOUSTON, June 25, 2014 /PRNewswire/ -- Rowan Companies plc ("Rowan" or the "Company") (NYSE: RDC) announced today that its monthly report of drilling rig status and contract information has been updated as of June 25, 2014.  The report titled "Monthly Fleet Status Report" can be found on the Company's website at www.rowancompanies.com.

Logo - http://photos.prnewswire.com/prnh/20120827/DA62568LOGO

Notable events in the current report include:

  • Rowan Relentless :  Entered into a two-year contract with Freeport-McMoRan Oil & Gas LLC, a subsidiary of Freeport-McMoRan Copper & Gold Inc. (NYSE: FCX), that will add approximately $425 million to Rowan's current contract backlog.  The drillship is expected to be delivered at the end of March 2015 and operate in the U.S. Gulf of Mexico starting early third quarter 2015. The Rowan Relentless is the fourth and final drillship in Rowan's current construction program.  With the award of this contract, all four of the Company's ultra-deepwater drillships are now under long-term contracts.
  • Rowan Renaissance :  Commenced operations on April 22, 2014.  Rig experienced approximately 17 days off rate time during 2Q 2014 for previously disclosed issues with the subsea systems.  This has been corrected and similar issues with the remaining drillships are not anticipated.  In addition, expected approximately 24 days off rate time during 2Q/3Q 2014 for previously planned commissioning of late arriving equipment.
  • Rowan Viking :  Reduced 2Q/3Q 2014 off rate time by 23 days to 107 days for previously schedule inspections and equipment modification.  Rig is expected to return to service in mid-August 2014 after entering the shipyard in May 2014. 
  • Gorilla VI:   Increased shipyard off rate time by 31 days during 3Q 2014.  Rig is currently expected to return to service at the end of July 2014.
  • Gorilla IV:   Awarded a one-well contract estimated at 40-45 days with Fieldwood Energy in the Gulf of Mexico which commenced mid-June 2014 at $125,000 per day, below the previous day rate of $180,000.  Rig was idle for 19 days during 2Q 2014 prior to commencing operations with its current customer.
  • Cecil Provine:   Previously scheduled off rate time for repairs and inspections increased by 14 days to 35 days and moved to 2Q 2014 from 3Q 2014. 

For the second quarter and full-year of 2014, the Company expects jack-up out-of-service time to be approximately 10% and 7-9%, respectively.  No operational downtime is included in projected out-of-service days, but the Company estimates jack-up operational downtime to account for approximately 2.5% of in-service days in current and future quarters.  Except for the out-of-service days specified in the Monthly Fleet Status Report for the Rowan Renaissance, the Company does not currently expect any further drillship out-of-service days in 2014, and continues to expect operational downtime to be approximately 5% after a break-in period of approximately six months up to one year when operational downtime could be somewhat higher.

Out-of-service days include days for which no revenues are recognized other than operational downtime and cold-stacked days.  The Company may be compensated for certain out-of-service days, such as for shipyard stays or for transit periods preceding a contract.  However, recognition of any such compensation received is deferred and recognized over the period of drilling operations.  Operational downtime is when a rig is under contract and unable to conduct planned operations due to equipment breakdowns or procedural failures.  

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